EUR/USD is calm on Wednesday, as the pair trades in the mid-1.13 line in the European session. On the release front, there are no economic events out of the Eurozone, but ECB head Mario Draghi will testify about the ECB Annual Report in the European Parliament. In the US, Federal Reserve head Janet Yellen continues a second day of testimony in Congress. The US will release New Home Sales, with the markets expecting a softer reading in the January report.
Janet Yellen testified before a Senate committee on Tuesday, saying that the Fed was “unlikely” to raise interest rates in the next few months, given current economic conditions. Her remarks seemed aimed at quelling rising speculation about a rate hike sometime in mid-2015, which has helped boost the US dollar’s performance against its major rivals. Yellen noted that the continuing growth should lead to the unemployment rate continuing to fall. The Fed Chair will resume testimony before the House Financial Services Committee on Wednesday, but it’s not likely that Yellen will say anything that could shake up the markets.
On the Eurozone front, Greece’s list of economic reforms was accepted by the country’s creditors on Tuesday, paving the way for an extension of the bailout for another four months. The Greek government has promised to continue with privatization plans and to meet budget targets. Still, the extension is a stop-gap measure and with sharp differences remaining between Greece and its creditors, the bailout crisis is far from over.
EUR/USD 1.1348 H: 1.1388 L: 1.1339
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